A) Distribution of Dividends between preferred and common shareholders

The Corporation has the following outstanding shares as of December 31, 2019: 10,000 Preferred Shares, 8%, $20 par value; issued and outstanding 300,000 Common shares, $1 par value; issued and outstanding During 2017 and 2018 no dividends were declared or paid. During 2019 the Board of Directors declared a dividend (Cash Dividend) of $54,000.

INSTRUCTIONS: 1. Calculate annual dividend limit for preferred shareholders:

2. Distribute the dividend declared by the Board of Directors to preferred shareholders and common shareholders. (Show computations to receive the points.)

Total Full Dividend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$54,000

a) Preferred shares are cumulative: (Computation) 2017 2018 2019

Preferred Stockholders

Common Stockholders

Total

b) Preferred Shares are NOT cumulative: (Calculations) 2017 2018 2019

Preferred Stockholders

Common Stockholders

Total